Grab-Uber Unification at Risk: Singapore Watchdogs Force Them to Unwind Their Merger

Ads





Uber had sold its Southeast Asia-based business to their opponent company Grab in the month of March for a whopping $6 billion and had got a stake of 27.5% in Singapore-based company Grab. While the deal was that Uber CEO would join Grab’s board, now the deal is at risk as Singapore’s antitrust regulator has warned the companies to revoke the deal because of lack of competition.

Some devastating conclusions were reached by the Competition and Consumer Commission Singapore (CCCS) after examining the deal for 3 long months. The commission said that Uber and Grab have failed to prove that the deal will increase the efficiency of the system, which would override the threat to competition. To be more specific about the issue, the commission also said that the competitive constraint has become insufficient in the taxi booking service industry. They are concerned about the new companies that are entering the business as they would need an initial upfront capital to compete.

In its investigation results, CCCS has found out that Grab can now lower its quality of services, reduce innovation in its product offerings, raise commission rates for drivers, and increase the fares for rides because of the diminutive competition. Grab has found these findings by the CCCS as a very narrow approach in defining competition.

Grab has reacted to this report and criticized it by saying that they are not the only transport business minds in the country. There are many others who are not as visible as them. Grab feels that the CCCS has not considered the intense competition between the new and old taxi service players over the past few months.

To restore the competitive environment in the country, CCCS has told Grab to bring back its ride-fares and commission fares that were imposed before the Uber-Grab deal. The organization has also asked Grab to axe their deals with taxi operators and free the drivers who use Uber’s Lion City Rentals from lock-in.

Grab has said in a statement that they will be taking appropriate steps to appeal against the decision made by the CCCS as the provisional decision is not final and effective.

Be the first to comment

Leave a Reply

Your email address will not be published.


*